Austrian State Printing House wins with Wolf Theiss in investment protection arbitration proceedings against the Republic Of Kosovo

01.08.2016

In arbitration proceedings relating to the breach of contract on the part of the Republic of Kosovo against the Austrian State Printing House (Österreichische Staatsdruckerei, or ÖSD), the International Arbitral Centre of the International Chamber of Commerce in Paris ruled in favour of the Austrian high-security company: the Republic of Kosovo must now pay to the State Printing House approx. EUR 5.0 million in addition to all related procedural costs.

In 2011, ÖSD had won a tender organized by the Ministry of the Interior of the Republic of Kosovo to produce electronic passports. While the State Printing House rendered its services in accordance with the contract, the Ministry of the Interior did not provide compensation as stipulated in the contract. A portion of the agreed upon order amount was transferred and distributed to parties other than ÖSD.

ÖSD along with Wolf Theiss subsequently presented a description of the relevant facts to the Kosovar authorities and the diplomatic representation of the Republic of Austria in Kosovo. Conversations with the Ministry of the Interior of the Republic of Kosovo about the settlement of outstanding debts and explanations of the irregularities regarding payments to ÖSD yielded no results. Instead, the Republic of Kosovo, prematurely, terminated the contract and discontinued all investigations into the vanished payments. Owing to Wolf Theiss's contacts to EULEX, these investigations were resumed. Subsequently, ÖSD, with Wolf Theiss, lodged a claim with the International Arbitral Centre of the International Chamber of Commerce in Paris.

The decision from an international arbitral court unambiguously confirms the position and claims of ÖSD: as a result of the proceedings, the Republic of Kosovo must pay damages (including loss of profits) amounting to EUR 5.0 million plus related procedural costs and fees to the State Printing House.

The Wolf Theiss team of advisers, under the leadership of Christian Mikosch (Partner, Corporate/M&A and head of the Kosovo desk), was involved from the beginning. The arbitration proceedings were, from the outset, extremely difficult from a political perspective, as only insufficient support was forthcoming from local authorities. Christian Mikosch says with pride, "Wolf Theiss used its existing contacts to international institutions in Kosovo to make a decisive contribution to the clarification of these matters. The Dispute Resolution team at Wolf Theiss was therefore able to conduct arbitration action down to the minutest detail." In addition to Christian Mikosch, Katrin Stauber (Senior Associate, Corporate/M&A) and Florian Haugeneder (Dispute Resolution – he has since left the firm) were involved throughout the entire case.